Find someone who looks at you the way AMC Entertainment Holdings (AMC -1.76%) CEO Adam Aron looks at box office receipts. The colorful helmsman of the country's leading multiplex operator woke up with cheerleader pompoms on Monday, tweeting that domestic ticket sales for the industry are coming off their best 14-day tally since February of last year.

We are approaching pre-pandemic audiences again. The $109.1 million in box office tallies over the weekend for the top 10 films is just 16% behind where it was for the same October weekend in 2019. Softening COVID-19 case counts are helping, but the real catalyst here is that Hollywood is ready to trust the local multiplex again.

A couple holding hands at a movie theater with the projector running.

Image source: Getty Images.

Coming back to the movies

All three weekends in October have had a major new release debut:

  • Oct.1: Venom: Let There Be Carnage.
  • Oct. 8: No Time to Die.
  • Oct. 15: Halloween Kills.

Carnage? Die? Kills? It's the industry that's killing it right now.

The cadence matters. When Shang-Chi and the Legend of Ten Rings set a new Labor Day holiday weekend record last month it was a bigger headline than the story. Labor Day is historically a sleepy weekend for exhibitors, as studios tend to push out their more promising potential blockbusters earlier into the summer. 

It was not a good thing to see the film stay on top for all of September. It meant that there wasn't enough fresh content to win patrons back to the silver screen. As joyous as the bar-raising opening weekend may have seemed at first, AMC stock plummeted 19% last month. October finds AMC and other movie theater stocks inching higher, and the healthy slate of gains could keep the upticks coming.

AMC stock will be volatile. Bears will be quick to point out the obvious valuation concerns. Aron may be talking about recent industry ticket sales being nearly where they were 20 months ago, but the price tag is substantially higher. The stock is trading nearly six times higher than where it was in mid-February of last year, and with the shares outstanding up fivefold in that time we're looking at a market cap that is 30 times what it was 20 months ago. 

The bullish counter is that market sentiment and momentum have clearly turned since the frenetic early days of the pandemic. We're not just talking about Aron rallying millions of retail investors, making ownership of AMC stock a badge of honor. AMC itself has taken steps to improve its business. Seeing that this weekend's ticket sales for domestic screenings across all chains is just 16% below where they were two years ago doesn't mean that AMC's own sales are off by that much. It has gained market share during the lull. It stayed open as its largest rival shut down a second time late last year. 

Ticket sales are also just one lever at AMC's disposal. Improved snack offerings and embracing mobile ordering across the chain finds high-margin concession stand sales soaring. Food and beverage revenue per customer at AMC's U.S. theaters has soared 42% over the past two years. The chain is not only gaining market share at the box office. Per-capita spending is also on a dramatic upswing.

Is this enough to justify a 30-fold jump in market cap since the last time ticket sales were this high? Before you answer consider that the starting line could be tainted, as the stock itself was also sorely oversold back then. The fourth quarter is off to a rousing start for multiplex operators in general and AMC in particular. Pass the popcorn.